Contribution of insurance companies to the growth of small and medium scale enterprises in Uganda:
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Date
2014-06
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Publisher
Kampala International University, College of Economics and Management.
Abstract
The purpose ofthis study was to establish the relationship between the contributions of insurance
companies and the growth of SMEs in NIC basing on the following objectives; to examine major
factors that affects the growth of SMEs; to assess the contribution of insurance companies to the
growth of SMEs; to investigate the factors inhibiting the purchase of insurance cover by SME
operators and to determine the strength of the relationship between insurance companies and
growth of SMEs.
The research was descriptive in nature involving quantitative methods which was administered
through questionnaires. The total sample comprised of 97 respondents of all the managers and
employees of National Insurance Corporation. Simple random sampling was used whereby the
researcher went to NIC and administered questionnaire to the sampled or selected employees.
Primary data was obtained from the library materials, textbooks, NIC brochures, internet and
journals. Data analysis was carried out using SPSS and frequency distribution tables.
Findings revealed that innovation is a strong empirical evidence for fast growing SMEs,
competition has a great effect on SMEs industry and credit remains a great challenge to the
growth of SMEs. Besides that insurance companies mitigate risks and enhance loan acceptability
by SMEs sector with banks. However low income earned by SMEs, high premium cost and
paperwork and experience and beliefs inhibit the purchase of insurance cover by SMEs.
Nevertheless, there is a strong positive relationship between insurance companies and the growth
of SMEs at Spear man Correlation Coefficient.
It was concluded that improvement in business skills increases the performance of SMEs.
However insurance companies do not lowers insurance rates and offer protection to SMEs
income statements. In addition SMEs being small in size and their inability to fully understand
the document limits them to get insurance cover. It was recommended that management of NIC
need to build a great relationship with SMEs as their customers in orders to develop and grow
them in trust and also lower the premium rates to SMEs in order to improve on their
performance. Also NIC need to have a fresh look at the scope and spectrum of services provided to SMEs and has a better understanding on the scale of enterprise sector
Description
a research report submitted to the college of economics and management in partial fulfillment of the requirements for the award of a degree of bachelor of economics and applied statistics Kampala international university.
Keywords
insurance companies, medium scale enterprises, insurance